I’m here with the COVID-19 continuity update for Australian businesses on 3rd August.
Things have moved fast over the last 48 hours, so I thought I’d provide you with an update this morning.
In response to the announcement of stage 4 restrictions in Victoria, this morning Treasurer Josh Frydenberg indicated there could be eligibility changes made to JobKeeper for Victorian businesses.
“There may have been Victorian businesses that were not eligible for JobKeeper in the June period, because for example, they had strong retail sales in May or June. But they are obviously in the September period seeing a lot of hardship. So in that case, we are looking at flexibility around the eligibility for JobKeeper for businesses beyond the end of September.
The Treasurer also said:
“We do recognise there’ll be an ongoing need in Victoria, and that’s why we’re having those conversations.
“We want them [the Victorian government] to share the load, it’s got to be matched support.”
We’re expecting to hear more today from Victorian Premier Dan Andrews on the stage 4 restrictions and what that will mean for businesses. There are various rumours circulating that it may be a total lockdown or it may only affect businesses with high concentrations of people working closely together. We’ll wait for details from the government before we commencing working with you to adjust your plans
No matter what the announcement is, the federal government is signalling that it will provide additional financial support to get Victorian businesses through this second wave.
I note that the already announced increase in restrictions to stage 4 in Melbourne and stage 3 in regional Victoria have already had an impact on some Tenfold clients. It’s a shame as some of these businesses had just started implementing their uplift plans and we were seeing impressive results.
I’ll be back later this afternoon with another update after the Victorian Premier’s press conference. If you have any questions in the meantime, please call your business coach and we’ll be able to help.
As you now know, Victorian businesses will be in “Go Slow” mode from Thursday.
What types of businesses can continue to operate in Victorian Stage 4 lockdown
As a team of coaches, we have already been speaking about how the changes will impact each Victorian client. We have the list of restrictions for the industries and categories, and we are working through them on an individual basis client by client.
Your coach will be in contact as soon as possible to plan out with you what it means for your specific business and sites, and to work out your modified operating conditions during the next 6 weeks of regulated speed.
The official information on the restrictions can be found here and attached is a copy of the official list from DHHS: https://www.dhhs.vic.gov.au/updates/coronavirus-covid-19/premiers-statement-business-restrictions
How do I determine if my jobs are classed as an essential service in Victoria Stage 4 Restrictions?
The first point of reference should be the Victorian Stage 4 Restrictions document – see the link provided above; however, at this point there are many grey areas.
We’ve heard of some operators who are handling this question by referring the decision to the primary client. In this case, the operator (for example a tradesperson doing work under and insurance build contract), would refer to their client (the homeowner) to decide if the repairs are essential for their safety and wellbeing.
If the client (in our scenario it’s the homeowner) deems that their job meets the requirements for permissible work under the Stage 4 restrictions, and the client is comfortable for the work to proceed with tradies on site, then that is one option for the tradie operator to demonstrate their intent to comply with the government restrictions.
For instance, if you’re working under the ‘Stage 4 Restrictions: Other Services’ classification, you could ask your client “Is this work essential for your wellbeing or livelihood? If so, are you comfortable for us to carry out the work?”
Another example is if you’re working under the ‘Stage 4 Restrictions: Construction’ classification, you could ask your client, “Would you class these repairs as being required for emergency or safety?”
I encourage you to still use a common sense approach to any jobs you are considering.
Critical Success Factor in Stage 4 Restrictions – Balancing Capacity and Utilisation
There is a key point that I want to make this evening as you consider the financial implications for your business: For many clients, revenues are going to be constrained over this period. For those that have qualified for JobKeeper (and some who didn’t qualify earlier may now become eligible), you need to assess how you can make the circumstances work to leverage the JobKeeper payments.
Work with your coach and the financial modelling you have done. Your joint focus should be on:
1. Assess your likely workload over the coming 6 weeks;
2. Shift your team to reduced hours to reduce your capacity;
3. Fully utilising these hours for productive work.
With JobKeeper, your wage costs are significantly subsidised and in some cases fully subsidised. This means you can operate at significantly lower revenues yet still breakeven or operate at a conservative profit. This is very important to get right so speak to your coach about this.
More Financial Support for Victorian Businesses in Lockdown
The first point to note is that there has already been some financial support announced, with an indication that there will be more to come. Businesses and sole traders will be eligible for an additional $5K grant from the Victorian government.
Businesses which have already received a Business Support Fund – Extension grant, or have applied for one, will not need to re-apply. Successful applicants will automatically receive this additional allocation, totalling $10K.
Applications for the program will be extended until 14 September 2020.
For more information or to register for the grant here: https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-package/business-support-fund
The Victorian Premier said discussions with the Commonwealth will be important in working out what cashflow support can be offered to small businesses.
Based on the quotes from Josh Frydenberg published in my briefing this morning, this could include changes to the JobKeeper Extension which might see more businesses able to remain part of the support program for longer. We await a firm announcement.
Ashley Thomson B.Eng(Hons), Grad. Dip. Mgmt, MEI
Tenfold Business Coaching